Business Process Outsourcing Models

Business Process Outsourcing Models
Article by Zarah AriolaZarah Ariola
Last Updated: March 22, 2023

Businesses all over the world have access to a robust network of professional peers who work in different circles, and still be able to collaborate. You may be a small startup or a large enterprise, but outsourcing your business process is an option to help optimize your workplace operations.

With a BPO model, you can partner with organizations that are more experienced in their specialized field. This can be any service, such as payroll, IT, customer support, or marketing content.

If these operations seem to be delaying your productivity when done internally, consider working with a BPO with the right business model to match your needs.

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What Is a BPO Model?

BPO stands for “business process outsourcing” which is a process of partnering with third-party service providers for your on-premise and remote work operations.

There’s a BPO provider for almost every service you can imagine, all to better optimize your process and productivity. To match the variety in these services, BPO models define what specific services you need support from. Naturally, various vendors will offer a different range of services depending on their capacity, so you’ll have to find a BPO that can cater to your requirements.

Fortunately, you’re not limited to organizations that are in the immediate vicinity to your business. In 2021, the global outsourcing market was worth $245.9 billion, on trend to have a compound annual growth rate (CAGR) of 9.1% from 2022 to 2030.

With 66% of businesses opting to outsource at least one department to support their operations, learn more about the different BPO models you can outsource to and the benefits they have to offer.

Where Are Your BPO Vendors Based?

One of the most impressive features of BPO providers is the ability to offer solutions to businesses from all over the globe. Your organization has the benefit of having access to providers with better pricing or services according to your needs, whether they’re close to or distant from your physical location.

There are three categories under which your BPO provider may be based:

  • Offshore – BPO providers located outside your business’s country.
  • Onshore – Outsourcing vendors which are located in the same country as your business.
  • Nearshore – Providers based in neighboring countries to where your business is located.

Nearshore outsourcing companies offer a middle ground between offshore and onshore options. They provide the advantage of cultural and geographical closeness without sacrificing cost-effectiveness.

8 Different Types of BPO Business Models

Outsourcing has been a well-established practice since after World War 2. Fast forward to the 21st century, it’s a global industry that most businesses participate in as vendors or clients.

The massive growth in the field has been prompted by the affordability it offers businesses. With this, operations are more cost-effective for long-term growth and give more breathing room for company expenses.

So, how can you take full advantage of these benefits, and more? Below are some of the business models that providers range from:

  1. Build-Operate-Transfer Model
  2. Captive Model
  3. Insourcing Model
  4. Joint Venture Model
  5. Project-Based Model
  6. Seasonal Outsourcing Model
  7. Staff Leasing Model
  8. Worldwide Outsourcing Model

1. Build-Operate-Transfer Model

In this BPO model, the outsourcing vendor is granted the rights to build, operate, and manage a project for a specific period. After which, ownership returns to the original company. This is typically applicable to construction and infrastructure projects.

2. Captive Model

An interesting turn for BPO is when a company outsources their core business functions to a subsidiary or an organization that they also own. , you can outsource processes to a company that you own and manage instead of a third-party provider.

It’s considerably less affordable than fully outsourcing, since you still have to support both businesses financially, but it’s the price to pay for stakeholders who prefer to take hold of the reins.

3. Insourcing Model

Perhaps an unexpected BPO model, insourcing is a good way to utilize the tools already at your disposal and effectively delegate your operations to your in-house employees.

Moreover, you can also recognize this as internal recruitment, which is recommended for companies whose operations remain largely managed by their own team. After all, why go through the trouble of finding potential outsourcing companies if you can do it well enough yourself?

4. Joint Venture Model

Partnering with another organization to manage specific functions for each other can make a more efficient process for both parties. This saves you time and effort looking for a provider and delegating their tasks as needed.

With a mutual agreement with another company, you’ll be familiar with how to do your best work, and rest easy knowing that your partner is doing the same.

5. Project-Based Model

A contract within this model is usually limited by the timeline of a task or the length of operations for a project. Since they can be completely focused on their specific task at hand, you can depend on a project-based contractor to deliver your requirements within the set timeline and support your internal team.

6. Seasonal Outsourcing Model

This model is most helpful to businesses whose industry runs through seasonal highs and lows, such as retail stores or online shops. Working with a BPO can support your business through its busiest times without having to recruit new hires for a short period.

7. Staff Leasing Model

BPOs can outsource employees to clients who may need the skillset without having to hire and recruit full-time roles. This benefits organizations who are growing fast but can’t scale up fast enough to catch up to their operations’ needs. It can also work similarly to project-based outsourcing, and your company can lease staff only for a particular project to support your in-house team.

8. Worldwide Outsourcing Model

A model especially beneficial to established enterprises, setting up services and branches from different destinations in the world. This allows your business to gain a more grounded footing with the local market, while also providing a more cost-effective solution for your client.

What Services Can BPO Providers Offer?

Along with the functions mentioned above, you can work with a BPO for support with the following tasks:

Compliance Services

Businesses of any industry will have rules and regulations to comply with. For smaller companies that are just starting out, it can be a lot to take in at once, so partnering with a provider can make the process much easier for your team.

Customer and Sales Interaction Services

Customer service and sales are the most synonymous with BPO. Many businesses outsource customer relations to providers who have the infrastructure and the workforce setup, often located offshore where they can offer lower costs than they would have hiring in-house teams locally.

Digital Sales Development

For organizations who’ve mainly managed a physical retail store and haven’t started their expansion to digital sales, it will be helpful to work with specialists who’ve supported businesses with similar needs before. These can be services which include developing your digital sales strategy, marketing your products online, and setting up an online shop and website for your business.

Finance and Banking Operations

In 2021, 50% of finance institutions shared their intent to outsource their functions, with 40% of them saying they have little intention of building or buying their own infrastructure. This shows how essential BPOs were during lockdown, when most companies needed to lower costs quickly and still be able to provide quality service to their customers.


Companies struggling to manage their marketing efforts or looking into expanding their operations can partner with BPOs to help bolster their strategy, create content plans, and release marketing content on your behalf.

This is often a long-term contract between a company and a BPO, since marketing timelines can often take at least six months to prepare ahead of time, then manage at launch. That said, outsourcing the process is still more affordable than if you recruited, hired, and trained your internal marketing team, and go through the process of developing your marketing strategy.

Recruitment, Payroll, and HR Services

For leadership and stakeholders eager to focus on business development rather than split their attention to managing their payroll with an in-house people and culture department, you can outsource hiring and HR management to a human resources BPO.

This eases the weight on management to work with different departments to establish operations. Instead, they can focus on the company’s long-term growth and success.

Benefits of BPO for Businesses

In 2022, up to 80% of small businesses in the US plan to outsource work to save on costs and time. Additionally, 26% of them do so to gain expert advice from specialists with prior skillset and experience in the industry.

Many operations flow better with the right team by your side, which makes outsourcing a highly beneficial resource for businesses of all sizes. Below are some of the advantages to partnering with a BPO service:

1. Flexible Operations and Functions

Fast-growing companies may be looking into operating at a 24/7 schedule without having to burden their local team to transitioning to a night shift. Working with a BPO to outsource a portion of your tasks can support your team.

On the other hand, you can work with PEO companies to help you along in managing manpower if you decide to recruit more people internally.

2. Access to New Techniques and Resources

Partnering with a BPO company allows you access to skillsets from all over the globe, which can give your business a competitive edge.

While there are also benefits to finding talent locally, you may have to contend with peers in the area, driving up the hiring rate. With an international search range, there’s a great chance to find more expertise, better experience, and affordable costs.

3. Cost-Effective Advantages

Perhaps the most considerable benefit to outsourcing your business processes. Lowering overhead costs while having excellent talent on your team has proven successful to a majority of businesses all over the world.

Along with this, outsourcing payroll is an option if you’d like to reduce the processes you would have to manage internally.

Should You Outsource Your Business Process?

The short answer is "yes,” especially if the benefits mentioned above are exactly the improvements you’d like to make moving forward. With the many kinds of BPO business models available, there’s a service provider for any operation you would want to outsource.

A professional BPO company can also help you with this process, so we advise looking for the right agency to partner with for your project.

We’ll find qualified BPO agencies for your project, for free.
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